In March, 2017, Elijah Rollins agreed to make a contribution of $1,000,000 to a nonprofit entity for construction of a wing to its research facility….

6.    In March, 2017, Elijah Rollins agreed to make a contribution of $1,000,000 to a nonprofit entity for construction of a wing to its research facility. The contribution was conditional on the nonprofit receiving matching donations from other donors. As of December 31, 2017, the nonprofit had secured 92% of the necessary matching contributions and assessed that the probability of not receiving the remaining 8% was remote. As a result, the nonprofit should make which of the following adjusting journal entries on December 31, 2017?

           A.  Debit Contributions Receivable and credit Contribution Revenue— Temporarily Restricted for $1,000,000.

B.  Debit Refundable Advance and credit Contributions Receivable-Temporarily

     Restricted for $1,000,000.

C.   Debit Contributions Receivable and credit Contribution Revenue

     Temporarily Restricted for $920,000.

           D.  Debit Cash and credit Contribution Revenue—Temporarily Restricted for                  $1,000,000.

7.           Which of the following statements is correct?

A.            Liabilities are increased when resources are received by a nonprofit entity that acts as an agent for the entity that provides the resources.

B.            In kind contributions can include pledges of future cash donations.

C.            A and B.

D.            Neither A nor B.

8.      Beginning in 2018, the disclosure “net assets with donor restrictions” will include which of the items below?

A.   Donated investments that are to be invested permanently according to the wishes of the donors.

B.   Multi-year pledges received from donors.

C.   A and B.

D.   Neither A nor B.

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